G.M. Restates Loss and Sees Possible Delay in Deal for Finance Arm

By MICHELINE MAYNARD

Published: August 2, 2006

The General Motors Corporation said Tuesday that its deal to sell a controlling interest in its financing subsidiary could be delayed until next year and said it had increased its second-quarter loss by $200 million.

The restatement is the third time this year that G.M. has adjusted its results after announcing them. Further, G.M. said it might make further adjustments until it closes its agreement to sell a stake in its finance arm, the General Motors Acceptance Corporation.

In a terse securities filing, G.M. said it hoped to conclude the deal by the end of 2006 as planned. But executives said it could take longer because of a federal moratorium that was recently placed on the approval of some banking transactions.

Earlier this year, G.M. agreed to sell 51 percent of G.M.A.C. to investors led by the equity group Cerberus Capital Management. The sale was part of G.M.'s efforts to raise cash after a $10.6 billion loss last year.

Last week, G.M.'s chief financial officer, Frederick A. Henderson, said the transaction was on track to close by year's end.

But on Friday, the Federal Deposit Insurance Corporation placed a six-month moratorium on approving any changes in control at industrial loan companies. F.D.I.C. approval is required for closing the deal, G.M. said.

G.M. said it revised its net loss for the second quarter to $3.4 billion, or $5.97 a share, from its previously announced $3.2 billion, or $5.62 a share.

G.M. said it increased an after-tax charge to reflect the difference between the book value and the taxable value of several G.M.A.C. units, which it did not name. The charge is now $690 million, G.M. said.

Earlier this year, G.M. increased its 2005 loss by $2 billion because of higher costs related to its restructuring and the bankruptcy at the Delphi Corporation, its parts supplier.

It also restated results for the last five years after discovering accounting errors.

After the first quarter, G.M. restated its preliminary results to reflect a change in the tax treatment of a health care deal with the United Automobile Workers, shifting from a $323 million loss to a $445 million profit, its first since 2004.